The Australian dollar has surged past the 70 US cents threshold for the first time since February 2023, driven by hotter-than-expected inflation data and a weakening greenback.
On Jan. 28, the currency peaked at 70.22 US cents after official figures revealed headline inflation accelerated to 3.8% in the 12 months to December 2025, exceeding the Reserve Bank of Australia’s 2% to 3% target band.
Analysts suggest the "uncomfortably high" inflation reading makes a rate hike increasingly likely when the RBA meets on Feb. 3, with bond traders now pricing in a 72% chance of an increase.
The local unit’s 5% gain this year makes it the second-best performer among the world’s major currencies.
This strength is bolstered by a slumping US dollar, which has hit a four-year low amid domestic political turmoil and aggressive trade rhetoric from President Donald Trump.